For a growing number of therapies, especially specialty drugs, manufacturers can no longer assume payer coverage and patient access based on regulatory approval alone. Increasingly, manufacturers are being asked to first demonstrate the “value” of the drug – to patients and to the healthcare system – and thus, justify its price, before being added to a payer’s formulary.
This demonstration of value will ultimately determine who has access to new therapies, but it also determines how patients gain that access. Value determinations can influence whether payers add additional barriers to certain drugs, such as requiring prior authorization from physicians or implementing step therapy, which forces patients to fail first on other drugs before trying others. The challenge? There is no objective or shared measure of value.
That’s the impetus behind MassBio’s Value of Health Series, a year-long initiative to explore the future of the biotech industry through the prism of drug pricing. The goal of the series is to educate biopharma companies, especially those in early and mid-stages, about the current and expected environment they’re operating in, and considerations these companies must make to ensure patient access when their drug comes to market. Drawing insights from a MassBio advisory group and thought leaders in the industry, we’ve released three separate whitepapers on the issue and as of this writing, have held two of the three related events.
Part I of MassBio’s Value of Health series examines the value equation from the perspectives of the various healthcare stakeholders, the increased use of health technology assessments (HTAs) in the U.S. in determining value, the current state of innovative payment methods with private payers, and the importance of real-world evidence in demonstrating the long-term value of therapies. We looked at real-world case studies from companies who are leading the way in value-based agreements, and the increased use and impact of HTAs, like the Institute for Clinical and Economic Review (ICER), in determining the cost-effectiveness of new therapies.
While Part I focuses almost exclusively on how to best demonstrate value to private payers, the public insurance market in the U.S. is a critical piece to understand as it covers more than one-third of insured Americans. So, in Part II we explore this in detail, breaking down Medicare and Medicaid in the U.S., existing access and reimbursement issues for innovative therapies and cures, proposed changes to those programs, and barriers that exist to innovative payment models. We looked at how Gilead Sciences was able to overcome some of those barriers and engage in a subscription model with Louisiana state to treat its hepatitis C (HCV) patients, as an example of how innovative payment models can be executed within state Medicaid programs.
We also considered those key international models of assessing value and determining access and what the U.S. may be able to learn from them. In the highly developed healthcare markets within Europe and elsewhere, single-payer or government-directed payers each have their own processes and metrics, but through broad reference pricing across markets, have important influences both within and beyond each country’s borders. Emerging markets like China are evolving at an incredible pace, presenting new opportunities for manufacturers to engage, but also posing challenges around how best to do this. We found that successfully bringing new therapies and cures to patients, regardless of the market or country, shares a common theme: clearly demonstrating the drug’s value to payers is critical to ensuring access and reasonable reimbursement. Public payers are no exception and while the need, methods, and opportunities to show that value differ, together Medicare, Medicaid, and international markets strive to provide the best value to the people they cover and the governments they work for.
Lastly, Part III of the series considers disruptions to the ever-evolving value, access, and reimbursement landscape as new players enter the arena and others consolidate. What impact will mergers between payers and PBMs have on drug pricing, patient access, and the ability to track and analyze data? How are digital technologies changing drug discovery and development and how patients access treatment? What new players are disrupting the value equation? Part III attempts to answer those questions and more.
For MassBio and our membership, this issue is especially timely. We’re at an inflection point, with science that’s been tested for decades finally becoming a reality for patients and a payer system that has not caught up with this level of innovation. Myriad factors are combining to alter the status quo – with policymakers demanding action, and healthcare stakeholders agreeing that we must come up with real solutions. If we don’t come together and address the value equation as an industry and ensure patient access to all new therapies, government or other stakeholders will – and they will likely get it wrong. It is our belief that the sooner companies start thinking about value and how they will demonstrate it, the fewer hurdles to patient access will exist.
To learn more and explore the impact varying disruptors will have on the value, access & reimbursement landscape, register to attend the third and final event of our 2019 series: Value Of Health Part III: Potential Disruptors' Impact To Value, Access & Reimbursement.